Why don’t US/Western companies come back home?
Today, the White House website still lists Trump’s hundreds of achievements [1] but under the heading ‘Brought jobs, factories and industries back to the USA’, there were only three entries, none of which is a factory coming back home.
Apparently, he failed to bring US factories back from China.
But WHY?
Well, let’s see why companies go to China in the first place: Apple cites lower production costs; Volkswagen claims higher profitability; Hollywood wants the large market; And many were driven by the move of their competitors. These remain significant reasons to stay put.
Undoubtedly, the CCP has played a crucial part, e.g., by making it very difficult for Western companies to repatriate money.
BUT, a factor which is at least equally important is the internal problem within the Western countries, where there are myriads of barriers and restrictions which deter companies.
For example, from 1977 to 2008, America lost 75% of its jobs in unionized manufacturing sector but gained 6% jobs in non-unionized manufacturing sector[2]. Unions were created to protect workers, but had the unintended effect of losing companies, and with them the jobs and incomes of workers.